Wednesday, December 28, 2016

To follow up on my last post, the author of this blog points out that Japan from the mid-19th century to 1911 had no tariff autonomy but managed to lay the foundation of an industrial take-off from 1880 to 1920.

This is true. Japan’s industrial development is an interesting subject. Japan’s rapid period of industrial take-off came after 1911, when its industrial production in mining, manufacturing, and chemical industries soared, and its GNP doubled from 1910 to 1930 (Sorensen 2002: 92). I repost below one of my old posts on this subject.

The foundation and early development of the industrial revolution in Meiji era Japan (1868–1912) in the 19th century actually involved significant state intervention (Noland and Pack 2003: 23).

From 1859 and 1869, Japan had been subjected to a number of unequal treaties forcing a liberal trade policy on it, in which tariffs had to be kept below 5%.

What was the result of the treaties imposed on Japan? The answer is as follows:

“… immediately after 1859, a flood of imports, unchecked by tariffs, soon devastated the domestic economy. Japan immediately faced a balance-of-payments problem because it depended heavily on imports of raw materials and capital goods indispensable for early industrialization. While the price of rice soared, the outflow of gold that followed was aggravated by the silver standard which Japan adopted, because the price of silver steadily fell vis-à-vis gold throughout the second half of the nineteenth century. Naturally, trade revision was a continuing issue in the early Meiji years.” (Sohn 2005: 22).

Because their hands were tied by treaties forcing a low tariff policy, the Meiji rulers sought to develop Japan’s economy by other means: what we would now call state industrial policy.

Okubo Toshimichi had visited Europe and Germany as part of a large Japanese delegation from 1871–1873 (Lee 2008: 513), and it is thought he was exposed to the ideas of the German Historical School. In particular, Okubo Toshimichi noted that Britain had pursued a period of protectionist mercantilism before adopting free trade, and urged the Japanese government to do the same (Lee 2008: 514).

As early as 1870, Wakayama Norikazu, an official in the Ministry of Finance, urged protectionism for Japan (Lee 2008: 512), and summarised the views of the American protectionist Henry Charles Carey (1793–1879), who was a follower of Alexander Hamilton’s protectionism. It seems too that the works of Henry Charles Carey and Friedrich List also became well known in Japan by the 1880s (Lee 2008: 512).

One of the first concerns of the Meiji state was to boost exports to stop the outflow of gold. To this end, the Meiji government increased production of tea and silk, by introducing domestic manufacturers to Western technology (Beasley 2000: 104). Shipping services also received government subsidies and patronage (Beasley 2000: 104).

The government also abolished the various currencies of the feudal lords, and by the New Currency Act (1871) created the yen as a national currency. A national central bank was created in 1882, with a monopoly on controlling the money supply in 1884.

The Meiji government also promoted industry and economic development in the following ways:

(1) The government created and built the fundamental public infrastructure in Japan underlying the modern economy: the postal service, railroads and telegraph (Flath 2005: 190). The postal service and the foundations of the railway system were the creation of the state (Beasley 2000: 104).

(2) The Meiji rulers had created industries in the most important areas of industry in that era: iron foundries, arsenals, and some shipbuilding. By 1880, government enterprises included 3 shipyards, 5 munitions works, 10 mines, and 52 factories (Flath 2005: 190). Modern cotton spinning mills were set up by the government in 1881 when the state acquired the latest English technology (Norman 2000: 129).

(3) The government initiated the development of chemical, glass and cement industries, which were then sold off to the private sector when they became profitable (Norman 2000: 127). With this privatisation program after 1882, Japan’s economic development came to have a larger role for private enterprise.

(4) The government used subsidies to other key industries. An important sector, as seen above, was marine transportation and shipbuilding, which received 75% of all subsidies from 1897 to 1913 (Flath 2005: 192). When tariff autonomy was attained again in 1911, Japan raised tariffs on foreign ships from 5% to 15% (Flath 2005: 192). To obtain revenue the government had introduced an agriculture tax in the Land Tax Reform of 1873, and in fact Japan’s state-directed economic development did not depend on foreign capital to a great extent in the Meiji era.

(5) The government created three state-controlled banks by the end of 19th century to direct credit to industrial development (Flath 2005: 192). Between 1885 and 1915 government spending accounted for 35% of capital investment, mainly in the crucial areas of steel, ships and railways (Flath 2005: 192). Throughout the late 19th century, outside agriculture, government provided about 50% of capital investment in Japan (Nafziger 1995: 63).

Although the evidence shows an important role for private enterprise from the 1880s, this was directed and supported by government policy, exactly the same as in Japan’s post-1945 industrial policy.

In short, these Meiji industrial policies set the foundation for Japan’s take-off after 1911.

And the upshot of all this is that a nation can pursue a successful but non-tariff infant industry protectionism, and instances where nations have industrialised by “free trade” seem to be fairly rare.

Jacks, David S. 2006. “New Results on the Tariff–Growth Paradox,” European Review of Economic History 10.2: 205–230.

Lehmann, Sibylle H. and Kevin H. O’Rourke. 2008. “The Structure of Protection and Growth in the Late 19th Century,” NBER Working Paper No. 14493, November
http://www.nber.org/papers/w14493

Tena-Junguito, Antonio. 2009. “Bairoch Revisited: Tariff Structure and Growth in the Late 19th Century,” IDEAS Working Paper Series from RePEc
http://e-archivo.uc3m.es/bitstream/handle/10016/11674/bairoch_tena_EHES_2009_ps.pdf

Lehmann, Sibylle H. and Kevin H. O’Rourke. 2011. “The Structure of Protection and Growth in the Late Nineteenth Century,” Review of Economics and Statistics 93.2: 606–616.

Schularick, Moritz and Solomou, Solomos. 2011. “Tariffs and Economic Growth in the First Era of Globalization,” Journal of Economic Growth 16.1: 33–70.

One of the crucial issues here is Paul Bairoch’s view that protectionism was correlated with strong economic growth in many Western nations in the 19th century (the so-called “19th century growth-tariff paradox”). See Bairoch (1993: 44–56).

That correlation was supported by O’Rourke (2000) and Clemens and Williamson (2001 and 2004), but questioned by Irwin (2002).

Lehmann and O’Rourke (2008 and 2011) in turn disputed Irwin (2002) and, by disaggregating the tariffs and focussing on tariffs on manufacturing goods, showed that these latter tariffs were indeed correlated with industrial growth. See also Jacks (2006) and Tena-Junguito (2009).

The naysayers and free trade fanatics complain that correlation between protectionism and growth doesn’t seem true of all nations, such as the future Third World (e.g., where the correlation is weak) and certain European periphery nations (such as Spain, Russia, and eastern Europe).

But the answer to this is simply that the selected use of tariff protectionism is often *a necessary but not sufficient condition* for industrial take-off. Other factors are required.

Furthermore, the average tariff rate of a nation is not a proper measure of whether efficient infant industry protectionism is being implemented. It is, above all, the structure of tariffs that is the key to successful infant industry protectionism.

Where domestic industries can be developed that in turn generate positive externalities throughout an entire economy, through increasing returns to scale, manufacturing productivity growth, synergies and cluster effects (Reinert 2007), we have efficient infant industry protectionism (see also Kaldor’s Growth Laws and Verdoorn’s Law). That of course means a nation’s early stages of development require selected tariffs on foreign imports, particularly of manufacturing goods.

The crucial point is that the creation of industries that gave increasing returns to scale (generally manufacturing) – rather than dead-end “diminishing returns to scale” – is what marks successful economic development. Once the new manufacturing sectors become internationally competitive, it is possible to reduce or eliminate tariffs. Note also that this policy is perfectly compatible with the fact the other types of tariffs (protecting inefficient rent seekers) or poorly targeted tariffs can be harmful to economic development.

Moreover, there are, obviously, other important factors that are required for industrial take-off, such as:

(1) the ability to get access to and deploy Western technology and production methods in manufacturing, as well as the ability to maintain technological development and productivity growth in manufacturing (a point related to Kaldor’s Growth Laws and Verdoorn’s Law);

(2) a large enough internal market for manufactured goods, or, if this is absent, reliable export markets to achieve export-led growth;

(3) the ability to overcome any balance of payments constraints as the economy develops, and if and when trade deficits occur. This of course means you must take account of Thirlwall’s Law.

It is no doubt true that some nations, because they are so small and face such severe constraints on economic development (e.g., Pacific Island nations), can never achieve an industrialised, rich economy like, say, South Korea. Be that as it may, many Third World nations today probably can with the right use of industrial policy, and massive changes in the international institutional structure.

Yet another piece of economic heresy in recent years was Rodríguez and Rodrik (2000), which questioned whether there is any necessary and positive relation between increasing trade openness and economic growth.

A final point is that so many of the articles by neoclassical economists on the age-old debate between protectionism and free trade assume their absurd general equilibrium models as the foundation of their counterfactual or empirical studies.

Post Keynesians know that general equilibrium theory is worthless. It follows that all general equilibrium models used to support free trade theory – or assumed in counterfactual models of what would have happened if free trade or protectionism had been imposed in any particular nation in the past – cannot be taken seriously. Even if such work using general equilibrium models gets the (for neoclassicals anyway) counterintuitive result that protectionism can work and be beneficial, this outcome would be accidental and not because their models reflect reality.

Further Reading
For my own posts against free trade and in support of infant industry protectionism, see here:

Wednesday, December 21, 2016

Slavoj Žižek was recently interviewed by Mehdi Hasan about Žižek’s position on Europe’s migrant crisis:

Yes, Žižek is correct that many of the migrants have come from nations with a profoundly different culture from that of Western Europe and there is a huge problem of lack of assimilation, but then, strangely, Žižek went on and seemed to want to deny this.

To the extent that European governments are responsible for the interventions in Libya or Syria, they should do something to help the genuine refugees in the Middle East. But Europe’s responsibility for the disaster in the Middle East ranks much lower than that of the United States and the Gulf states.

We now know from one of Hillary Clinton’s emails as quoted in a WikiLeaks Podesta email dated to 2014 (which can be read here) that the Saudi and Qatari governments fund ISIS and are also responsible for the disaster in Syria:

“While this military/para-military operation is moving forward, we need to use our diplomatic and more traditional intelligence assets to bring pressure on the governments of Qatar and Saudi Arabia, which are providing clandestine financial and logistic support to ISIL and other radical Sunni groups in the region.”
https://wikileaks.org/podesta-emails/emailid/3774

This issue is also discussed here:

So the Saudi and Qatari governments also bare a huge part of the blame for this refugee crisis, and ought to take refugees.

Furthermore, it does not follow that all these refugees should be brought to Europe or America. Instead, the US, EU and European nations should use their tremendous wealth and power to persuade other majority Muslim nations to take refugees and pay for humane and decent conditions for these refugees there – in nations where these refugees speak the same language, share the same religion, and have the same culture, e.g., nations in North Africa, Saudi Arabia, Qatar, the United Arab Emirates, Kuwait, and Bahrain (the Gulf states in particular being rich enough to afford it). Money and resources could be offered to those nations not rich enough to afford it.

Moreover, many of the migrants who came into Europe in 2015 and this year are not genuine refugees at all, but economic migrants from many countries not even in Middle East at all (see here).

Europe cannot take millions of economic migrants this year and every year for the foreseeable future. By accepting millions of mere economic migrants, the floodgates will be opened and disaster will follow.

Multiculturalism in Europe is one of the greatest failures of the neoliberal era, and open borders and mass immigration themselves are both part of the catastrophic neoliberal program of the past 40 years or so.

Despite the contemptible nonsense by Mehdi Hasan, the civilisation of Europe, its people, and its cultures need to be protected against the demographic and cultural catastrophe that is coming.

But a leftist like Žižek only vaguely understands this.

Žižek is also mostly wrong about the right-wing populists. For example, Nigel Farage and UKIP are not the “greatest threats” to Europe. UKIP is basically a nationalist Thatcherite party, and they are neither fascist nor far right.

Probably the greatest threat to Europe today is the European Union followed by the tidal wave of mass immigration from the Third World. Most of the populist right, whatever their mistakes on many other issues (and one could point to plenty), are at least opposed to both of these genuine threats.

Monday, December 19, 2016

This is a video of Robert Skidelsky’s lecture on Keynes’s General Theory, given on 10th May, 2016 at Gdańsk University of Technology, Poland:

I have a few minor points:

(1) It is important not to let Keynes’ use of the expression “animal spirits” confuse people. Austrians and libertarians seize on this point, as I pointed out long ago here. Keynes used “animal spirits” in the sense of “a spontaneous [human] urge to action rather than inaction” as relevant to the actions of business people and economic agents. But this concept isn’t the important point in Keynes’ theory of business decision-making: the point was that business people are given over to waves of pessimism and optimism, and most of their decisions about investment are subject to varying degrees of qualitative uncertainty, and the probability of future events relevant to their decision-making cannot be given an objective probability score as in a priori probabilities.

The waves of business pessimism and optimism are a very great cause of the aggregate level of investment, and hence the booms and busts in a capitalist economy.

[sc. Keynes’s] ... theory of involuntary unemployment is perfectly simple and can be expressed in a paragraph, or in a sentence. If you express it in a sentence, you simply say that enterprise is the launching of resources upon a project whose outcome you do not, and cannot, know. The business of enterprise involves investment, the investing of large amounts of resources--huge sums of money--in things whose outcome you cannot be certain of, which could perfectly well turn into a disaster or a brilliant success.

The people who do this kind of investing are essentially gamblers and they can lose their nerve. And if they decide to withdraw from trade, they sweep their chips up from the table. If they decide it’s too risky, if their nerve gives out and they can’t bring themselves to go on investing, they cease to give employment and that is the explanation. When business is at all unsettled--when there’s any sign at all of depression--or when there’s been a lot of investment and people have run out of ideas, or when their goods are not selling quite as fast as they have been, they no longer know what the marginal value product of an extra man is—it’s non-existent. How can you say that a certain number of men have a certain marginal productivity when you can’t know what the per unit value of the goods they would produce if you employed them would sell for?”“An Interview with G.L.S. Shackle,” The Austrian Economics Newsletter, Spring 1983.

(3) the collapse of Keynesian theory and policy from the 1970s was the collapse of Neoclassical synthesis Keynesianism, not the heterodox Post Keynesian tradition that has been a far more accurate and realistic development of Keynes’ economic theory.

(4) An interesting point that Skidelsky makes from 1.18.14 is that Keynes’s General Theory did not use the more realistic imperfect competition model of his time (which had also been partly developed at Cambridge) but assumed competitive markets, and Keynes pointed out that all his arguments in the General Theory were fully valid in a world of competitive markets, not just in a world of imperfect competition.

Skidelsky has written some excellent introductory work on Keynes’ economics, as follows:

Saturday, December 17, 2016

When was the last time a Republican president was so hostile to free trade and dismissed the usual “free market” apologetics as the “dumb market”?

Of course, it is possible that Trump will excessively rely on tax cuts and deregulation and provoke a race to the bottom in his trade policies. Or his tax cuts could be combined with protectionism, plus some harmful deregulation (which could be undone by a future Democratic president), and these policies might actually do a great deal of good to re-shore manufacturing to the US.

But, in any case, even though his implied message here is quite obviously bashing the free market and free trade, there has to be the ritualistic and, frankly, comically religious praise of “free trade” – even though it’s plain as day he’s planning to impose protectionism.

It would be so much better if he had said something like this:

“I love free trade in principle, OK? But, in practice, we just don’t have it, OK? We just don’t have it. Everybody cheats. China cheats. Japan cheats. The Europeans cheat. So therefore we need to be smart, and have fair trade, and protect American jobs and manufacturing. And, if we need tariffs, then that’s smart trade.”

Friday, December 16, 2016

An interesting discussion of the life and career of John Kenneth Galbraith:

One of the speakers is Richard Parke, the author of John Kenneth Galbraith: His Life, His Politics, His Economics (University of Chicago Press, Chicago, 2007), the best biography of Galbraith I’ve seen.

Wednesday, December 14, 2016

One of many comical moments we now seem to have in the wake of Trump’s victory, and, curiously, on Fox news:

Yes, mass immigration is a weapon of class warfare. Tucker Carlson is correct (although he did not put it explicitly in the way I just did). The response of this “socialist” is lame. Even if you raised the minimum wage in the US, illegal mass immigration still causes downward pressure on wages because so much of the labour that illegal migrants do is off the books or on the black market, with their pay given under the table, as it were. And it still creates massive competition for scare employment. And what about H-1B visas where migrants are imported and American citizens fired?

And this is *before* we even get to the social and cultural harm done by Third World mass immigration, which is in addition to the economic harm.

Monday, December 12, 2016

The video appeared in the feminist Lena Dunham’s Twitter feed here. The video is accompanied by the bizarre title “It’s not the end of men, it’s the evolution of men into better men,” but the video doesn’t talk about “evolution”: it plainly says “extinction.”

There’s something horrific about this video. Replace the word “white” with “black,” or with “Asian” or “Jewish,” and you can see precisely why and instantly. Replace the words “straight white men” with “Jewish men” and you have something that would be applauded by the hardcore Alt Right.

This is a special type of hatred which the cultural left has spawned, and it’s not pretty.

There’s something deeply sick and pathologically unhealthy about a society where a large part of the left can openly call for the death or dying out of straight white men or even white people in general, and then think this is something wonderful.

Imagine if we were in Israel, and we met a cultural leftist, Jewish Israeli, who said: “straight white Jewish men are the problem. They need to die out and be replaced with other men!” That would be a sentiment that any neo-Nazi anti-Semite would applaud.

Or a Black Lives Matter activist proclaims that white people have no right to affirm their life:

How did we come to this? (alas, this is a topic for another time).

But another major issue that is driving the Alt Right is illustrated perfectly by a recent post on the Alt Left closed-group Facebook page (which can be joined here), which can reproduced here:

“‘The increasing immigration to the west from third world countries, combined with low birth rates and the spread of Islam in western countries such as Germany, France, the UK and Netherlands, will ultimately change the fabric of society as we know it. With it, it’s very likely that western values (post-Enlightenment French Revolution values) will die out.’

Do you agree with this? Yes? No? Why?”

No healthy people would wish to be demographically and culturally replaced, whether we are talking of Japanese, Koreans, Chinese, Indonesians, Indians, Tibetans, Iranians, Kenyans, Sudanese, or Namibians, or whatever.

Yet we in the West do actually face a demographic problem like this, because fertility rates have in many nations fallen below the replacement rate of 2.1, and our neoliberal elites and the cultural left are in favour of huge levels of Third World mass immigration.

Some people in America – many of whom are libertarians – who realise this and observe the bizarre tidal wave of anti-white hatred on the Left and its extreme Identity politics see no political movement that is speaking about these issues.

If every ethnic minority can have Identity politics, they ask, then why not white people?

So where do they go?

Answer: they gravitate to the rising Alt Right movement.

We can see the evidence for this from one Richard Spencer (who coined the term “Alt Right”), a leader of the movement:

So where did these Alt Right people come from? According to Spencer, about 50–75% of their movement consists of former libertarians. That is quite incredible.

Others in Europe – who are mostly not libertarians, but conventional conservatives or even liberals or leftists – are attracted to the populist right-wing movements or Identitarian movements, because these at least are opposed to mass immigration and are civic/cultural nationalists. (It is important to stress that many of the populist right-wing parties in Europe like UKIP or the Alternative for Germany (AfD) are not Alt Right, however, but civic nationalist conservatives. Not even the French National Front is really Alt Right either.)

Of course, people who gravitate to the Alt Right tend to develop all sorts of extreme and dangerous opinions too: hostility to democracy, support for authoritarianism, neo-Nazism, extreme anti-Semitism, and sometimes even far right ideas about eugenics, but the evidence suggests they mostly pick these ideas up once they get to the Alt Right.

So how do you address the fundamental, serious issues driving the rise of the Alt Right, the Identitarian movements, or populist Right?

Could it be some common sense measures might work, such as the following?:

(1) end mass immigration policies, for the simple reason that they cause increasingly worse economic, social and cultural problems;

(2) end the irrational and pathological anti-white hatred on the left;

(3) end the appeasement of Islamism and stop the Islamisation of the Western world;

(4) recognise the reality that European people do not wish to be made minorities in their own nations, any more than the Japanese or Iranians or Kenyans would want this. There is nothing inherently “racist,” “hateful” or “fascist” about this. It is human nature.

This is the bare minimum of what is needed. An end to neoliberalism would also help, but does not get at the heart of the matter.

However, it seems most of the cultural left will not see reason here. The mainstream Left will need to collapse even further and suffer shattering political defeats before common sense prevails.

And that is where an Alt Left can come to the rescue. It is vitally important an Alt Left movement makes propositions (1), (2), (3), and (4) a sine qua non of its political program. That is how you can defeat the Alt Right and the populist right by breaking their stranglehold over the discussion and concern with these issues, which are very real and not necessarily a sign of some kind of irrational hatred or far right political extremism per se.

To see this, we need only go back to the Old Left well before the 1960s. Does anybody seriously believe that the Old Left, the old trade unions or Old Labour or Social Democratic parties would have been in favour of reducing their own people to a minority in their own nations, and importing people with a highly incompatible culture by the millions? Or that they would have tolerated a bizarre racial hatred against their own people now common on the cultural left?

Answer: no way. And, if we were capable of going back in time and talking to them and explaining what the modern Left has done and become, they would think us mad.

Sunday, December 11, 2016

Who made the following statement on illegal immigration into the Unites States?:

“All Americans, not only in the states most heavily affected, but in every place in this country are rightly disturbed by the large numbers of illegal aliens entering our country.

The jobs they hold might otherwise be held by citizens or legal immigrants. The public services they use impose burdens on our taxpayers. That's why our Administration has moved aggressively to secure our borders more, by hiring a record number of new border guards, by deporting twice as many criminal aliens as ever before, by cracking down on illegal hiring, by barring welfare benefits to illegal aliens.

In the budget I will present to you, we will try to do more to speed the deportation of illegal aliens who are arrested for crimes, to better identify illegal aliens in the workplace as recommended by the commission headed by former Congresswoman Barbara Jordan.

We are a nation of immigrants, but we are also a nation of laws. It is wrong and ultimately self-defeating for a nation of immigrants to permit the kind of abuse of our immigration laws we have seen in recent years, and we must do more to stop it.”

Answer: it was Bill Clinton, the 42nd President of the United States, as can be seen here.

Given that this is not that far from what Trump said about illegal immigration, why is it that Trump is reviled as an evil “racist” and “xenophobe,” but Bill Clinton is a hero of the Democratic party and many liberal Americans?

But this is not the only restrictionist immigration policy pursued by Democrats in living memory.

Friday, December 9, 2016

We must remember that Mises – as a Classical Liberal – was a doctrinaire supporter of laissez faire open borders.

In Mises’ book Omnipotent Government: The Rise of the Total State and Total War (1944), written during the Second World War, he admits an exception to open borders:

“Pacifism is doomed in an age of etatism. .... [sc. Liberalism] did not declaim against war; it sought to establish conditions, in which war would not pay, to abolish war by doing away with the causes. It did not succeed because along came etatism. When the pacifists of our day tell the peoples that war cannot improve their well-being, they are mistaken. The aggressor nations remain convinced that a victorious war could improve the fate of their citizens.

These considerations are not a plea for opening America and the British Dominions to German, Italian, and Japanese immigrants. Under present conditions America and Australia would simply commit suicide by admitting Nazis, Fascists, and Japanese. They could as well directly surrender to the Führer and to the Mikado. Immigrants from the totalitarian countries are today the vanguard of their armies, a fifth column whose invasion would render all measures of defense useless. America and Australia can preserve their freedom, their civilizations, and their economic institutions only by rigidly barring access to the subjects of the dictators. But these conditions are the outcome of etatism. In the liberal past the immigrants came not as pacemakers of conquest but as loyal citizens of their new country.” (Mises 2010 [1944]: 106).

So at least Mises had the intelligence to recognise that the last thing that America needed in WWII was to allow millions of immigrants from Germany.

But what about when Third World cultures are very different from the culture of the Western world, and mass immigration into the West causes severe social and cultural problems?

Mises, it appears, never thinks of this, nor has anything to say about it. Mises may as well be an unhinged multiculturalist for whom all cultures are equal and substitutable.

Later on in Omnipotent Government, Mises has this to say:

“We have already pointed out that the maintenance of migration barriers against totalitarian nations aiming at world conquest is indispensable to political and military defense. It would undoubtedly be wrong to assert that under present conditions all kinds of migration barriers are the outcome of the misguided selfish class interests of labor. However, as against the Marxian doctrine of imperialism, almost generally accepted today, it is necessary to emphasize that the capitalists and entrepreneurs in their capacity as employers are not at all interested in the establishment of immigration barriers. Even if we were to agree to the fallacious doctrine that profits and interest come into existence because the entrepreneurs and capitalists withhold from the worker a part of what should rightly be paid to him, it is obvious that neither their short-run nor their long-run interests push the capitalists and entrepreneurs toward measures which raise domestic wage rates. Capital does not favor immigration barriers any more than it does Sozialpolitik, whose inextricable outcome is protectionism. If the selfish class interests of big business were supreme in the world, as the Marxians tell us, there would be no trade barriers. The owners of the most efficient plants are—under domestic economic freedom—not interested in protection. They would not ask for import duties were it not to compensate for the rise in costs caused by pro-labor policies.

As long as there are migration barriers, wage rates fixed on the domestic labor market remain at a higher level in those countries in which physical conditions for production are more favorable—as, for instance, in the United States—than in countries offering less favorable conditions. Tendencies toward an equalization of wage rates are absent when the migration of workers is prevented. Under free trade combined with migration barriers there would prevail in the United States a tendency toward an expansion of those branches of production in which wages form a comparatively small part of the total costs of production. Those branches which require comparatively more labor (for instance, the garment trade) would shrink. The resulting imports would bring about neither bad business nor unemployment. They would be compensated by an increase in the export of goods which can be produced to the greatest advantage in this country. They would raise the standard of living both in America and abroad. While some enterprises are menaced by free trade, the interests of the bulk of industry and of the whole nation are not. The main argument advanced in favor of American protectionism, namely, that protection is needed to maintain the nation’s high standard of living, is fallacious. American wage rates are protected by the immigration laws.

It is, more or less, true that Big Business loves cheap labour, and has a long history of promoting Third World mass immigration into colonies created by Europeans, whether in Canada, America, Australia or New Zealand, and increasingly even Europe itself.

The destruction of high wages in the West and the tendencies “toward an equalization of wage rates” is a capitalist wet dream. Mises certainly wanted it. But of course it means the destruction of high wages, labour rights, working conditions and living standards in the West.

Mises’ rosy picture of what would happen in America under free trade and free movement of people is of course a fantasy world as delusional as utopian Communism, and all dependent on the fiction of

(1) wage and price flexibility leading to a clearing of product markets and the labour market, and

(2) Ricardo’s fallacy of the benefits of free trade by comparative advantage.

Once we relax these assumptions Mises’ vision falls apart – just as America has fallen apart from free trade and increasingly free movement of people over the past 40 years.

Mises also analyses the open-borders policies that might hypothetically be pursued by Marxist internationalists or a world Communist state:

“A socialist world-embracing management could, of course, consider a policy under which all human beings are treated alike; it could try to ship workers and capital from one area to another, without considering the vested interests of the labor groups of different countries or of different linguistic groups. But nothing can justify the illusion that these labor groups, whose per capita income and standard of living would be reduced by such a policy, would be prepared to tolerate it. No socialist of the Western nations considers socialism to be a scheme which (even if we were to grant the fallacious expectations that socialist production would increase the productivity of labor) must result in lowering living standards in those nations. The workers of the West are not striving for equalization of their earnings with those of the more than 1,000 million extremely poor peasants and workers of Asia and Africa. For the same reason that they oppose immigration under capitalism, these workers would oppose such a policy of labor transfer on the part of a socialist world management. They would rather fight than agree to abolition of the existing discriminations between the lucky inhabitants of comparatively underpopulated areas and the unfortunate inhabitants of the overpopulated areas. Whether we call such struggles civil wars or foreign wars is immaterial.

The workers of the West favor socialism because they hope to improve their condition by the abolition of what they describe as unearned incomes. We are not concerned with the fallacies of these expectations. We have only to emphasize that these Western socialists do not want to share their incomes with the underprivileged masses of the East. They are not prepared to renounce the most valuable privilege which they enjoy under etatism and economic nationalism—the exclusion of foreign labor. The American workers are for the maintenance of what they call ‘the American way of life,’ not for a world socialist way of life, which would lie somewhere between the present American and the coolie level, probably much nearer to the latter than to the former. This is stark reality that no socialist rhetoric can conjure away.

The same selfish group interests which through migration barriers have frustrated the liberal plans for world-wide peaceful cooperation of nations, states, and individuals would destroy the internal peace within a socialist world state. The peace argument is just as baseless and erroneous as all the other arguments brought forward to demonstrate the practicability and expediency of socialism.” (Mises 2010 [1944]: 110–111).

On the one hand, Mises is correct that mass Third World immigration into the West would provoke a tremendous backlash, because it would severely lower wages and living standards.

We are seeing such a backlash today, but the difference is that it is being pursued by neoliberal governments whose economic policies of free trade and open borders are much closer to Mises’ Classical liberalism than anything demanded by Communists.

And, in reality, Mises’ Classical liberalism – if it attempted to totally abolish national borders and allow millions to pour into the West – would also provoke massive popular hostility and social conflict in the West, of a similar type to that which he envisages in some hypothetical Communist world.

Yet, as far as I can see, Mises – whatever practical exceptions he may have made during wartime – was still ideologically and theoretically committed to this Classical Liberal insane-asylum world of free trade and open borders. So why couldn’t he see how socially and culturally destructive and doomed to failure such open borders policies would be?

This issue is precisely one of the keys to understanding what has gone wrong in the West: free movement of people is a suicidal policy for the Western world.

Yet so many of our political ideologies are pushing this policy endlessly, whether it is Conservative neoliberalism, leftist neoliberalism, the cultural left, the Classical liberals, open borders libertarians, Marxist internationalists, and even the Labour parties or leftist parties that have recently rediscovered some left-wing economics.

In fact, ideologically both (1) Classical liberalism/libertarianism and (2) Marxism/Communism share the same insane vision of our world: one without national borders and with the mass movement of people to destroy traditional cultures, ethnicities and identities.

This can be seen in Lenin’s panegyric to the mass movement of people in 1913:

“Capitalism has given rise to a special form of migration of nations. The rapidly developing industrial countries, introducing machinery on a large scale and ousting the backward countries from the world market, raise wages at home above the average rate and thus attract workers from the backward countries.

Hundreds of thousands of workers thus wander hundreds and thousands of versts. Advanced capitalism drags them forcibly into its orbit, tears them out of the backwoods in which they live, makes them participants in the world-historical movement and brings them face to face with the powerful, united, international class of factory owners.

There can be no doubt that dire poverty alone compels people to abandon their native land, and that the capitalists exploit the immigrant workers in the most shameless manner. But only reactionaries can shut their eyes to the progressive significance of this modern migration of nations. Emancipation from the yoke of capital is impossible without the further development of capitalism, and without the class struggle that is based on it. And it is into this struggle that capitalism is drawing the masses of the working people of the whole world, breaking down the musty, fusty habits of local life, breaking down national barriers and prejudices, uniting workers from all countries in huge factories and mines in America, Germany, and so forth.

America heads the list of countries which import workers. ….

The bourgeoisie incites the workers of one nation against those of another in the endeavour to keep them disunited. Class-conscious workers, realising that the break-down of all the national barriers by capitalism is inevitable and progressive, are trying to help to enlighten and organise their fellow-workers from the backward countries.”
V. I. Lenin, “Capitalism and Workers’ Immigration,” Za Pravdu No. 22, October 29, 1913.

https://www.marxists.org/archive/lenin/works/1913/oct/29.htm

And, finally, in Engels’ The Principles of Communism (written in 1847):

“What will be the attitude of communism to existing nationalities?

The nationalities of the peoples associating themselves in accordance with the principle of community will be compelled to mingle with each other as a result of this association and thereby to dissolve themselves, just as the various estate and class distinctions must disappear through the abolition of their basis, private property.”
https://www.marxists.org/archive/marx/works/1847/11/prin-com.htm

Whereas a Communist like Engels can happily admit to wanting the dissolution of national cultures and nationalities, the Classical Liberals and libertarians would bring it about, if not by intent, then by the consequences of their laissez faire theology.

BIBLIOGRAPHY
Mises, Ludwig von. 2010 [1944]. Omnipotent Government: The Rise of the Total State and Total War. Ludwig von Mises Institute, Auburn, Ala.

Thursday, December 8, 2016

Remember if and when Marine Le Pen wins the French election and Geert Wilders becomes prime minister of Holland next year, it won’t have anything to do with the hundreds – and probably thousands – of incidents like this, and ones even worse, occurring on the streets of Europe every day (e.g., this, this and this). And no doubt if you suspect it might have something to do with it, you’re a hateful racist and xenophobe.

1. Exceptionalism based on white male guilt has been a profoundly negative influence on the 1st world political left. It minimizes the flaws of foreign peoples and governments, and minimizes the strengths of western peoples and governments, and drives the profound distortions that plague the progressive world view. Recognizing this does not preclude an honest and critical assessment of western civilization past and present.

2. Karl Marx was a brilliant man with many useful insights. But the historical dialectic, this determinist, bipolar division of society into oppressive Empire and marginalized and oppressed Rebels needs to die. This is not a call for a blind moral relativism and especially not a call to exempt rich and powerful elites from scrutiny, but rather a call for a more nuanced view of history and social conflict. That said, the idea that ‘power corrupts and absolute power corrupts absolutely’ belongs at the center of any sane view of society.

3. It is flattering to believe oneself a part of a larger than life, heroic struggle against some kind of oppression or another. A world view like this adds excitement and meaning to any otherwise drab or spoilt life. It also enables self righteousness in favor of self reflection, and a tendency to demonize others. This does not mean that opposition corruption and abuse of power should not be undertaken, but rather that it be done in a spirit of sobriety and self awareness rather than a spirit of zealotry and crusade.

4. Privilege theory has done vastly more harm than good. This is not to say that discrimination cannot be identified and combated. But privilege theory is not about this. Privilege theory is all about ego. It is all about holding all white men collectively accountable for the worst actions of specific individuals, and for circumstances that are not in their power to change. Were feminist and critical race theorists to be honest, they would admit that this is all about implying collective moral superiority.

5. ‘Power plus prejudice’ – this self serving rationalization that claims that women and minorities cannot be sexist or racist because those things require power, which their self referencing dogmas claim they don’t have – needs to die. Again, were honesty to prevail, this post modern antenomianism (an old religious heresy that claimed that moral law did not apply to the ‘elect’) is all about smugness and licensing the shitty behavior of those fortunate enough to fall within the charmed circle of preferred identities privileged enough not to be ‘privileged.’

6. Privilege and inequality, where they still exist and are pressing in their nature, are now primarily economic in nature. Income inequality and the undue influence of money in politics is addressed by center-left parties only at election time. That these parties are often in the back pockets of moneyed interests perhaps explains why identity instead of economics have become such central issues on the left in the last few decades. The need for this to change is urgent.

7. Willful misuse of terms like ‘racist’, ‘misogynist’, ‘homophobe’, ‘Islamophobe’ and so on was not a wise idea. People are becoming increasingly less easily emotionally blackmailed or kafkatrapped into accepting liberal positions on issues by intentionally falsified accusations of bigotry. Doing this also trivializes these terms and erodes their seriousness in the public eye. Remember the story of the boy who cried wolf?

8. Particularly galling is the exploitative misuse of bigotry smears to shield people, ideas or policies from otherwise legitimate criticism and scrutiny. Branding all opposition to mass immigration as ‘racist’ or refusal to support Hillary Clinton's presidential campaign as ‘misogyny’ would be cases in point.

9. It is incumbent upon progressive people to convince others of the merits of their world view. It is not, under any circumstances, an entitlement of progressive people to be agreed with on anything. Progressives must act accordingly at all times.

10. Thesis 9 holds true even if you have a vagina. Or black skin. Or any other marginalized identity. Identity does not determine truth (see theses 4 and 5). Progressives must stop resorting to identity to smear opponents or sidestep arguments made against their positions.

11. Your political views, voting patterns, stances on social issues, marginalized identities or any combination thereof does not make you either morally or intellectually superior to others. Stop acting as though they do.

12. People of color can be racist, even against whites. Women can be sexist, even against men. LGBT people can be cis/heterophobic. Denying this undermines the entire purpose of being against racism, sexism or homophobia. Stop falling back on the worn self serving rationalizations of privilege and power plus prejudice – see theses 4 and 5 above. Progressives will be taken more seriously when they hold themselves to their own moral codes.

13. Expressing disdain for working class and poor white men in liberal terms – implying that they're stupid, inbred, inherently racist and bigoted is the utmost height of arrogance and hypocrisy. Doubly so if this is done from the privileged upper middle class bully pulpits of academia or mainstream media. That the left has no business stigmatizing poverty for anyone, but especially on the basis of race, should require no elaboration.

14. Stop lying. Really. Just stop. Stop denying that any progressive pundit or academic holds unpopular or controversial views when it is demonstrably the case that at least some of them do. Don’t claim that there are no feminists who hate all men or equate heterosex with rape (as two examples of many) when this is demonstrably and provably the case. Once the lie is exposed, do not minimize or rationalize it, or play semantic games to avoid dealing with the implications. Admit, and distance yourselves from stupid or mean spirited views on the left.

15. Deal with dissent and counter arguments in an open and honest manner. Stop with such passive-aggressive behaviors such as playing stupid and willfully misinterpreting or misunderstanding arguments that challenge your world views. Correctly understand opposed arguments before responding to them – even if they trigger you in some way, and address their central thesis and main supporting points when in contention with them.

16. Do not cherry pick opponent’s arguments and present them out of context in order to make them say something they're not.

17. Do not derail conversations by making issues out of minor details in opponent's arguments that are not essential to their main point or thesis.

18. Do not exploit faux outrage – of the ‘I just can’t even’ variety – or treat opponent's arguments as morally abhorrent or intentionally provocative or insulting without clear evidence to support your outrage. Remember that emotional states do not constitute arguments. See theses 9 and 10.

19. When your views are protected in academic safe spaces, are funded by big business and the state, are protected from criticism and scrutiny by ‘harassment’ or ‘hate speech’ laws, and enjoy unchallenged favorable bias in mainstream media outlets, the group that you belong to can no longer call itself or the people it claims to represent ‘marginalized.’ The status enjoyed by feminism and anti-racism in western societies are the very textbook definitions of privilege.

20. Your emotional states are not claims on other people’s behaviors. It is not incumbent on males to cross the street or vote for Hillary Clinton because you’re a woman (see thesis 5) and are afraid of the consequences of males not complying with what would, if honestly assessed, be prejudiced and ideological assumptions underlying those fears.

21. The left has an academia problem. There’s nothing wrong with being a leftist academic. But too much time in Ivory Tower echo chambers creates distance from the realities of common people, and over reliance on self-referencing theory that seems to have to take precedence over reality whenever the two conflict. Academic disdain for the plebs, when it happens, does not belong on the left.

22. Academia has a left problem. It is no secret now that political correctness and an ideological chill effect prevails on many campuses. Censorship and no-platforming of right leaning speakers is merely the tip of the iceberg. Leftist ideologues act as gate keepers, barring career progress for academics who don't tow the correct line. This is not a healthy thing for a democratic polity.

23. Let’s be honest here: Do any of you really believe this postmodernism crap? If morality and even man's basic means of acquiring moral knowledge are really socially constructed and merely reflections of existing prejudices, than how can you be so sure that feminism and multiculturalism are truly preferable to patriarchy and racism? Because you sure act as if they are.

24. The black studies and women’s studies departments do not speak for all people of color and women. Stop acting as if they do. They speak for a cult of ideologues and the closed body of self referencing work it produces. Where external (or even internal) criticisms of cherished doctrines are frowned upon as being ‘oppressive’, you've created a credentialized ideological echo chamber.

25. There is a crucial difference between advocating for equal rights for a discriminated against group, and simply being partisans in favor of that group. Progressives have lost sight of the difference long ago. This was supposed to be about bring women and minorities to parity with white males, not simply being pro-woman, pro minority, right or wrong. See theses 1 and 2.

26. There is a crucial difference between ‘harassment’ and ‘hate speech,’ on the one hand, and disagreement in good faith with the tenets of social justice academia, on the other. Learn what that difference is and see to it that it is respected in legislation, in academia, in the workplace, online and in all of your personal relationships.

27. For God’s sake (no pun intended), learn the difference between a race and a religion. Stop treating religion as a proxy for race, and stop assuming that despite for religions coded white (Christianity) is fair game while despite for religions coded brown/black (Islam) somehow equates to racism or colonialism. See theses 1 and 5 in the previous entry.

28. Pursuant to 21 above, stop with the Islamic exceptionalism already. Please. Just stop. You'd be the first to object to dominionist theologians who want biblical law for western nations, so stop pandering and kowtowing to Islamist migrants who want Shari’a law. Sharia law does not belong in the west. Period.

29. There’s a difference between an honest and critical analysis of Islamic theology on the one hand, and hatred for Muslim people and advocacy of abuse against them on the other. Please display knowledge of this difference during discourse on the subject. See theses 7, 8, 15–18 in the previous entry.

30. Much of the concern that westerners have with Islamism lies with just how illiberal it is. They have no concept of separation of church and state. They have blasphemy laws. They execute people who renounce the faith. They call for the infiltration of and, if possible, the conquest of non Islamic societies. What business do progressive leftists have with any of this? Why do we want it in our countries?

31. The treatment of women, LGBT people, non Muslims, the wrong kinds of Muslims and so on in places like Saudi Arabia, the Islamic State and Taliban controlled Afghanistan should especially concern progressive people. Or is their plight not important because their oppressors aren’t white, Christian or European? Think long on the racism implicit in this line of reasoning. See thesis 1 in the previous entry.

32. Mass immigration. Just mass immigration. Stop and think. By flooding a polity in unskilled laborers, you drive wages down and prices up, and strain existing infrastructure, compromising the government’s ability to provide essential services to its population. The poor and lower rungs of the working classes pay the price for this. If support for mass immigration is therefore progressive, who needs conservatives? See theses 7 and 8 in the previous entry.

33. Reconciling support for mass immigration, especially from Islamic societies with support for radical feminism, queer politics, trans-rights and so on makes squaring the circle look easy, logical and obvious. Unless the name of the game is ‘destroy western civilization by whatever means are necessary,’ which progressives insist it isn’t whenever the far right suggests this, pause and reflect on this. See theses 1, 7 and 8 in the previous entry.

34. Being offended isn't an argument. Stop acting like it is. Hurt feelings do not absolve you of the requirement that you prove your point. See theses 15, 18 and 20.

35. Stop denying or handwaving events that are harmful to your narrative. Do not say that there are no false claims of campus date rape or that there are no substantiated claims of migrant rape, especially in Europe. It’s hard to keep information away from people in the social media age. Even if most moderators on social media pages are progressives who work hard to suppress such news. The news will get out, and it will damage your credibility if you've previously tried to suppress it.

36. Most mainstream media and especially most social media platforms have a strongly progressive/liberal bias. Just admit it. They do. Consider how this might invalidate your claims that your charmed circle of preferred identities are marginalized. See thesis 19. And claiming corporate concentration of media ownership does not get you out of this. Rather, ponder instead the relationship between rapacious capitalism and social liberalism.

37. Laws and corporate policies that limit or suppress free speech almost always work to the ultimate benefit of the powerful. Censorship has very rarely, if ever, really benefited marginalized people. Using hate speech and harassment laws and allegations of bigotry to smear or silence people empowers state and corporate power much more than it empowers marginalized minorities. It is a strategy the left needs to reconsider.

38. Left of center activists have no business trying to get people fired from their jobs due to their political beliefs. For how long did leftists object, and rightly so, when this was done to them? Have we forgotten the red scare and McCarthyism? Supporting the sacking of white nationalists and Christian fundamentalists sets a dangerous precedent that progressives will be reminded of when this is, once again, done to them and they object to it.

39. Any kind of ‘leftism’ that measures progress by how many women and people of color are CEOs of or sit on the boards of directors of fortune 500 corporations is hardly a leftism worth having. The problem here is not equal opportunity to serve in senior management if qualified, but of ignoring the huge concentrations of wealth and power in the hands of so few senior personnel.

40. An off color joke or remark that offends a minority, or a male complementing a female coworker can result in legal settlements worth millions of dollars and destroy multiple careers while abuse of the rights of the workers, union busting, outsourcing, predatory marketing practices, accountancy scandals, environmental degradation and corruption of public officials – among other abuses – barely warrant legislative and quite often media attention. I shouldn’t have to say this is a problem, but I do have to. Frequently.” “Progressive Reformation,” Samizdat, 1 December 2016.“Progressive Reformation: Theses 21 to 40,” 5 December 2016.

Monday, December 5, 2016

It’s quite straightforward: gender quality is an article of faith of modern Third Wave Feminism, and so is the cult-like demand for all professions to be 50% male and 50% female.

Of course, we all know that the feminist fanatics strangely do not seem to be demanding gender equality in trades like construction workers, garbage collectors, deep sea fishermen, mechanics, etc., because these trades are dirty, difficult and sometimes dangerous, and most women – generally speaking – have neither the type of bodily strength nor interest to do such work.

But, at the same time, there are plenty of professions largely dominated by women, for example, secretaries, administrative assistants, housekeepers, house cleaners, flight attendants, nurses, receptionists, or workers in women’s beauty salons (e.g., see here).

So would we really want these latter professions to be 50% men as well?

The answer is: no, the very idea is stupid and unrealistic.

The reason? It’s simple male psychology: most men would find such work demeaning, humiliating, emasculating, and devaluing them as men. The modern feminist cult of gender equality can’t realistically work here, even if some minority of men do work in these professions and don’t mind the work (and I am not trying to bash such men).

Another point is that the ability to earn a decent salary and have at least a respectable trade or profession is one of the most important advantages a man can have in attracting a wife. But modern feminism and neoliberalism seem intent on savagely attacking the ability of men to do this, and the male ability to attain a high-wage, secure employment by which he – as the only household breadwinner – could support a wife and family.

So what happens when men are forced into emasculating professions through desperation or poverty and women out-earn men and are increasingly pushed into higher-earning professions with gender quotas and obviously unfair hiring practices?

The answer: men are going to become *increasingly unattractive to women* (for some data in support of this, see here). Women like higher-earning husbands and alpha males, not men working for miserable wages as nurses or receptionists:

“One indicator of women’s lifestyle preferences is found in patterns of educational homogamy: whether women choose husbands with equal levels of education, or prefer a better-educated and higher-earning spouse.

Women’s aspiration to marry up, if they can, to a man who is better-educated and higher-earning, persists in most European countries. The Nordic countries share this pattern with all other parts of Europe. Women thereby continue to use marriage as an alternative or supplement to their employment careers. Financial dependence on a man has lost none of its attractions after the equal opportunities revolution. Symmetrical family roles are not the ideal sought by most couples, even though they are popular among the minority of highly educated professionals. It is thus not surprising that wives generally earn less than their husbands, and that most couples rationally decide that it makes sense for her to take on the larger share of childcare, and use most or all the parental leave allowance. This is just as true of the Nordic countries as elsewhere.”
Hakim, Catherine. 2011. Feminist Myths and Magic Medicine: The Flawed Thinking behind Calls for Further Equality, Centre for Policy Studies, London, p. 24.
http://eprints.lse.ac.uk/36488/

I also doubt that many men really feel a sense of self-respect, self-esteem and masculinity in a household where a woman is the sole breadwinner.

But, to sum up, all this would suggest that pushing gender equality to the ridiculous extremes now demanded by the cultural left will have horrible effects on family formation, marriage, and the birth rate.